Globalization: Definition and Impact—Updated

By Dr. Kwame Nantambu
September 03, 2012

Definition

In a book titled The Caribbean in the Global Political Economy (1994), Professor Hilbourne A. Watson suggests that globalization "is an intensive process that conforms to the tendencies and laws of motion of (international) capital." It "occurs in production, distribution, marketing, technology transfer, information telecommunications and other aspects of economic activity." (p.68).

Professor Watson contends that globalization "demands market liberalization and removal of obstacles that restrict the 'free' movement of capital"; it represents "neo-liberalism which is being championed by the United States and multilateral lending institutions" such as the International Monetary Fund (IMF).

It is in this specific instance that the IMF functions as the economic weapon under the rubric of European supremacy to destabilize and/or overthrow Third World governments that are perceived as being anti-American. The IMF achieves this goal through the imposition of harsh, draconian "conditionality measures" it imposes on these countries when they apply for assistance to solve their balance of payments problems.

These measures include: (1) abolition/liberalization of foreign exchange and import controls (2) devaluation of currency (3) implementation of anti-inflationary programs including (a) control of bank credit, higher interest rate and higher reserve requirements for commercial banks (b) control of government deficit, curbs in government social spending, increases in taxes and in the prices charged by public enterprises and abolition of consumer subsidies (c) control of wage increases and (d) dismantling of price controls and (4) provide greater hospitality to foreign investment/investors.

In addition, emphasis must be placed on enhancing the profit capability of the private sector (domestic capitalists) and foreign investors.

Third World governments that were either destabilized or overthrown as a result of these measures comprise Chile, Nicaragua and Venezuela (Latin America, Dominican Republic, Jamaica, Guyana and Trinidad and Tobago (Caribbean) and Egypt, Jordan, Zambia, Tanzania and Sudan (Afrika).

In fact, between 1984 and early 1990s, these IMF draconian "conditionality measures" resulted in 551 deaths, 1,884 persons wounded or injured, 6,108 persons arrested and loss of 27,000 public sector jobs in the Third World.

Dr. Watson goes on to say that globalization "is a quantitative and qualitative process" that "undermines national economic and political borders"; ergo, Transnational Enterprises (TNEs) become more powerful than national governments. Globalization transfer the character of economies from national to international.

Under globalization, TNEs now comprise over 500,000 foreign subsidies established by 60,000 parent companies based mainly in the industrial countries, The world's largest TNEs hold US$1.8 trillion in foreign assets and employ about six million persons in their foreign subsidies.

According to George Dhanny in his 2005 article titled "Effects of globalization", "power is internationally centralized within the European Union and increasingly transferred to commercial banks which do not recognize democracy and transcends national boundaries."

Impact — Third World

In analyzing the impact of globalization in 2006, the World Bank found that the richest one-fifth of the world's population possesses about 80 per cent of the world's income, while the poorest one-fifth in the Third World owns a mere 1 per cent of global income. The number of persons living on income of less than US2$ per day has risen by about 50 per cent since 1980 and this stark reality has seriously called into question the severe negative "impact of globalization on the poorest countries."

Globalization through liberalization has not allowed economic gains to trickle down to Third World countries. Global economic income has been skewed toward the industrial countries. In the final analysis, globalization only serves the interests of monopoly/international capital and the capitalist class.

Impact — Caribbean

At the outset, it must be stated that globalization has resulted in the Euro-American re-colonization of the Caribbean in a multiplicity of manifestations. For example:

Culinary habits: The proliferation of American fast food outlets such as KFC, White Castle, Subway, Mario’s Pizza, Pizza Boys, Pizza Hut, Burger King, Mc Donald’s, Church’s Chicken, Royal Castle, Ginzanos Sub, Popeye’s Chicken & Sea food, Quintanos, Wendy’s, Dominos, etc, has not only completely changed the eating habits of Caribbean peoples but has also brought about the phenomenon of obesity among young people in the region. Trinidad and Tobago has the highest obesity rate per capita in the Caribbean. Caribbean peoples now identify with American fast foods rather than those produced locally. There seems to be a disdain for local foods. The food import bill for Trinidad and Tobago now stands at TT$ 4.6 billion. Sixty per cent of the diseases which Caribbean people die from are caused by unhealthy eating habits and consumption of artyifically processed foods.

Over the past decade, T&T’s obesity rate among women and children has risen by about 55.5 %; childhood obesity has risen by 30%; more than 25% of school aged- children 5-18 years are obese.

Socio-familial values: (i) The social reality of "single-parent family household" is now the accepted norm in the Caribbean. This was an unknown, albeit unaccepted, reality thirty or forty years ago. (ii) The television habits/lifestyles of Caribbean peoples have also been affected by globalization. Indeed, over seventy-five per cent of the TV programs shown in the Caribbean has America as their "country of origin" or "country of conceptualization." (iii)American music such as "hip hop" and "rap" has also impacted Caribbean music and (iv) Caribbean peoples now readily identify with American clothes and other fashion accessories.

Dress code: In Trinidad and Tobago, young men follow their Afrikan-American counterparts by wearing their pants almost down to their knees. In so doing, their underwear is exposed. This is the insane, negative, self-destructive criminal behavior /lifestyle of Afrikan-Americans with which Trinbagonian men identify. This Afrikan-American prison-oriented/induced criminal dress code has now become a fashion statement among young Afrikan Trinibagonian men.

Industrial development: In the case of Trinidad and Tobago, one finds that the ruling government is pursuing an industrial policy to re-make Port-of-Spain in the image and likeness of Euro-America’s Manhattan, Miami and/or San Francisco.

In the final analysis, globalization has resulted in the economic Balkanization of Caribbean economies a la United States and retrogressive progression.

Shem Hotep ("I go in peace").

Dr. Kwame Nantambu is a part-time lecturer at Cipriani College of Labour and Co-operative Studies.